Potential impact of Obama's 'Buffett rule'

Debate rages over raising taxes for wealthy


This is a rush transcript from "Your World," April 10, 2012. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF "YOUR WORLD": All right, a big sell-off at the corner of Wall and Broad today, some linking to the president’s call for higher taxes on the rich. That of course is nothing new.

The timing of it might just have been more coincidence than anything.

But California Democratic Congresswoman Lynn Woolsey supports what the president is trying to do by enforcing the so-called Buffett rule that those earn better than $1 million should pay at least a 30 percent tax rate.

Congresswoman, do you think that that unnerved investing?

REP. LYNN WOOLSEY, D-CALIF.: Well, I represent one of the wealthiest constituencies in the country.

And I am telling you they tell me that they know they cannot be the only ones that are making good on this economy. They want middle-class Americans to do well as well. It is clear that if a secretary pays a higher tax rate than a millionaire, if the wealthiest are getting wealthier, and the middle class is losing out, that their fate is worsening, there is something is very wrong with the system that we have today. So, yes, I support the Buffett rule.



The way you address that and correct that would be since a lot of rich folks tend to get a lot of their income unearned, as they say, off dividends and capital gains, that sort of thing, that would effectively mean doubling that tax rate.

Many on Wall Street say that that would be very, very damaging because there is very little reason to invest when the costs of investing has effectively been doubled. What do you say?

WOOLSEY: I say it has worked in the past without the wealthiest getting a handout and without them having to do their fair share. But I also say we can do more.


CAVUTO: Well, you’re not -- you are saying they are not doing their fair share?


CAVUTO: Wait a minute. Are you saying they are not doing their fair share, paying the lion share of the taxes in this country, that the rich are not doing enough?

WOOLSEY: Well, actually, they might be also -- they are also benefiting to a much greater degree than what the taxes they are paying.

You pay taxes because you are benefiting. And when the middle class is worsening, then we know that we are not we standing up for what America is all about. America is not about the top 2 percent of the wealthiest people. America is about the middle class.


CAVUTO: All right, but you’re saying, ma’am, the way to reconcile that is to get the taxes high on the rich and to bring them down, rather than provide an incentive to bring the middle class up. That seems kind of backward.

WOOLSEY: Well, it seems like it is counterintuitive because every time we talk about what the middle class needs, it is the top 2 percent who put the pressure on those of us in the Congress to not let what we know needs to happen, happen.

They want to shred the...


CAVUTO: Well, don’t they want to just see you cut spending? Isn’t that problem? Forget about charging more the product. Correct the product.

WOOLSEY: Well, yes, but -- cut spending, but not for them, but for the poor and the middle class. It depends on who is going to be harmed by cutting that spending. And it has to go both ways.


CAVUTO: Would you tell the rich who are happy -- let’s the rich are happy to pay...

WOOLSEY: We also could end the war in Afghanistan, Neil.


CAVUTO: All right. But the rich are happy to pay more taxes if it goes to getting spending under control, you are telling me that will not change; you are just going to pay for more government?

WOOLSEY: No, I don’t say that that is what we do.

I say we also go with the Progressive Caucus budget, which brings our troops home from Afghanistan, saving over $1 trillion over the next 10 years, stopping our investment in our nuclear arsenal, and by not investing in our Cold War weapons. There’s so much we can do besides shredding the safety net for the people of the country, seniors and...


CAVUTO: All right, Congresswoman.

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